Compare Banks With
Federal Credit Unions
How to Manage Your Money Better
A lot of people wish to compare banks with federal credit unions and discover which is best for them. Do you also? If so, enjoy this simple tutorial and then decide for yourself how to manage your money best for your own financial situation.
Yes, because of deregulation and changing laws, both banks and credit unions are similar in many respects. They both provide many similar basic services, so the more you know about each one, the better informed financial decisions you are able to make about which financial institution you will use to store the wealth you are creating by following the household budgeting guidelines found on this website and in my personalized financial coaching program.
Who Owns Each?When you compare banks with federal credit unions, knowing who owns each one helps a lot. Credit union owners are known as members being the very customers who have their money there. On the other hand, banks are corporations whose profits go to the shareholders as opposed to its customers.
Operation Costs
With they're not for a profit status and attitude at the credit unions, all overhead will be lower as the members get a split of the profits in the form of dividends (a different name for interest). Banks, on the other hand, are corporations in it for the profit and thus must pay federal and state taxes. Keep this in mind when you compare banks with Federal credit unions.
What About Fees?
Though usually no fees for checking or savings accounts at credit unions, and loan application fees are quite low in comparison. For banks, those $5.00 or so monthly fees account for a big part of their overall profits. Also, at credit unions, interest rates are lower as well as their structure of fees.
Oversight
The Federal Deposit Insurance Corporation the (FDIC) regulates, issues, and governs the banks while it is the National Credit Union Administration (NCUA) who performes the same functions for the credit unions. When you compare banks with federal credit unions, there is no difference in this respect as well as the $250,000 insurance on individual accounts. Your money is relatively safe at both places, barring a meltdown of the entire American economy … which is a different subject altogether.
And the Provided Services?
Banks prefer business accounts more and credit unions are more for the typical individual, although both institutions do quite well with both markets. Another specialty for banks is in their trust services offerings. They do well at managing estate trusts when a family needs the help and expertise. On the other hand, credit unions tend to cater more to personal service, training tellers to treat everyone the same regardless of the balance, and to also use names when addressing members.
Which to Choose?
As you read this, it might seem apparent that I favor credit unions over banks, and you would be correct. When I compare banks with federal credit unions for myself and my family, it is the more personal atmosphere that a nonprofit provides while still providing virtually everything the bank does. I understand that banks have their fiercely loyal customers who appreciate the business atmosphere, and you may be one of them. Consider yourself still very important.
This article serves the purpose of helping those who have not yet decided which one to choose. If that is you, shop around comparing fees, charges, and where the profits go. Visit a branch of each where you will be typically going to and see how you are treated.
Once you compare banks with federal credit unions yourself and weigh all of the factors given to you today, you will be much better informed to choose the best financial institution to handle your money and help you meet your household budgeting goals. You are learning ho to manage your money ith them, correct? I wish you well.
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